Should you invest in optimization tools? Columnist Brian Massey dishes out data on how many businesses are using them and whether that gives them a leg up.

If your business was interested in college-bound high school students, I could tell you something about how sophisticated your online competition was.

For instance, I could tell you that, according to an analysis I recently performed, 78% of your competition (registration required) has Web analytics tools installed on their site. They are collecting the data that tells them how they are doing in the competition for higher-education leads.

I could also tell you that only 3.4% of them have A/B testing software installed on their website, that 3.7% of them have click-tracking software installed, and less than 1% have session recording tools installed.

These numbers may tell you that these tools — testing, click-tracking and session recording — aren’t important yet. But, what if I told you that almost 14% of businesses spending $50,000 or more on paid search ads had split-testing software installed?

This means that the best-funded marketers also have the best data about how to turn more potential college students into higher-education leads for their business. This might make you nervous.

If you are a college or university and are among the 3.4% of your industry brethren who use split-testing tools, you will have an advantage. You will pay less for leads, will get higher-quality students, and can spend more on paid advertising. If you are not, are you worried?

Data That Tells a Story

Like economists and other data scientists, Conversion Scientists love to find data that help them answer burning questions about how groups of people behave online. I found such a dataset at SpyFu.com, and the results of my analysis are telling. This data gives us the opportunity to see how an industry is evolving as website optimization grows as a practice.

I used this dataset to calculate the percentage of websites in certain industries that have certain tools installed, tools that indicate a business is using data to make decisions and optimize their websites.

I also sliced this data based on the amount of money these businesses are spending on paid search ads.

Snooping On Tools

The key to knowing how quickly an industry segment is adopting data as a competitive advantage is understanding the tools the businesses install on their websites. As it turns out, this is pretty easy in most cases.

When you add Omniture or Google Analytics to a website, you do so by adding JavaScript “tags.” These snippets of code execute the code that saves information about the visitor on any page of the site. It turns out that SpyFu.com has been looking for these tags on the sites they survey and saving them.

Tools You Should Have On Your Site

The ultimate goal of conversion optimization tools is to lower your acquisition costs and increase the revenue you generate from each visitor. When you improve these metrics, you essentially make your marketing cheaper. Companies with higher revenue per visit and lower acquisition costs can bid more on keywords and spend more on ads because they make more from each click.

Which tools would we look for to score an industry on its adoption of website optimization tools? They would be tools that provide data on how visitors are using the site, where they are failing, and what moves them to vote on a business with their interest and wallets.

Here’s the approach we took:

Web Analytics

We consider Web analytics to be the foundation of a data-driven online business. The SpyFu database classifies a wide range of tools as “Web Analytics,” including Adobe SiteCatalyst (we still call you “Omniture”), Coremetrics, Google Analytics, GetClicky, MixPanel and Stat Counter in the Web Analytics category. They tell us how populations of our visitors are behaving.

Qualitative Behavioral Analytics

These tools are used to study individual visitor behavior. They include session recording software such as ClickTale, SessionCam and Inspectlet. We also look for surveying software and user feedback tools, such as iPerceptions, Survey Monkey and Qualaroo.

These tell us that a business is collecting information about what is getting in the way of visitors and what is working. This information allows us to generate ideas — which we call “hypotheses” when we want to bring party conversation to an uncomfortable halt — for how to make a site work better.

Quantitative Behavioral Analytics

Tools in this category aggregate the behavior of large populations of visitors. These larger sample sizes give us trend information on how portions of a site are performing, and how things can be improved. Web analytics software falls into this category. But we can look specifically at click-tracking software, such as ClickTale and CrazyEgg.

Performance-Enhancing Tools

I’m probably going to get some undesirable traffic from this subheading.

Have you tested your mobile website on a 3G connection? You should. This is where your most impatient audience is seeing you. The only thing sadder than a slow-loading site is one that doesn’t have to be.

Online businesses that are working to improve the interactivity of their site are truly embracing their visitors and contributing to their bottom line.

Social Analytics

Those businesses investing in social media as a source of customers and prospects will be using tools to aid their investment. Social media marketing requires a steadfast commitment and discipline. It is not sufficient to put a few social icons on your site.

The existence of tools like Facebook Domain Insights on a site tells us that a business means social business.

User Feedback Tools

One way to find out what you visitors are experiencing is to ask them. This is the role of user feedback tools. SpyFu puts tools like Kampyle, ForeSee and 4Q Survey in this category.

Is There an Advantage?

Just because a business has installed these tools on its site doesn’t mean that it’s using them, or using them well. How much of an advantage does an online business have if it’s investing in these tools?

At the very least, the businesses that have installed these tools have signaled that they have begun an important journey. Some will gain a competitive advantage with these tools. Others will lose interest when faced with early defeats in using them.

How many have embarked on this journey? I chose two industries to test this question using the SpyFu data. We know from experience that these industries have had success using these technologies, making a significant difference in their businesses.

The Online Competition for College-bound Students

The first is a high-stakes competition for college-bound students. This segment represents business marketing to consumers with a high price tag offering: a college education. In addition to traditional and online institutions of higher learning, this segment has some interesting players in the mix. Competing for these precious visits are credit card companies, book stores and a network of affiliates selling traffic to all of the above.

One would assume that this segment is loaded up on optimization weaponry. Well, yes and no.

In the Web analytics department, you can say this industry segment has gotten the message, with 78% of those online businesses spending at least $500 a month on pay-per-click advertising having some form of Web analytics installed.

78% of businesses competing in the higher education industry have Web analytics installed.

Things change when you look at the more advanced optimization tools. Of those businesses spending over $50,000 a month, only 13.5% have split-testing tools installed. And they look like geniuses compared with those businesses with lower ad spends.

The companies competing for higher-education leads have low adoption of website optimization tools.

In our survey, there were 587 businesses spending over $50,000 on search ads. Only 79 had split-testing software installed. I see an opportunity in this industry.

The next big area of investment is Social Analytics. Considering that those looking for a college are between high school and graduate school, this is not surprising. Investments in social and mobile make sense to an extent.

Click tracking, or “heat map” tools com in third. We recommend that every one of our clients installs one of these tools. The insights are very revealing. Yet, only 3.7% of all companies spending $500 or more on search ads had it installed.

Things were only a bit better in the inventory and asset tracking marketplace.

Serious Business-to-business

To contrast this higher-education marketplace, I chose to highlight a business-to-business segment. The inventory and asset management space is another high-stakes segment with solutions bringing thousands of dollars in yearly software licensing fees, plus a steady sale of barcode scanners, printers and services.

These guys should have their optimization in full gear.

Like our friends in the college student space, analytics adoption is strong. Over 80% of businesses spending $500 or more on search ads in this space have Web analytics installed.

Asset and inventory management vendors have invested in Web analytics.

When we look at the other tool categories, we see a big wealth gap.

The big spenders in the asset and inventory management space adopt optimization tools for more than businesses with smaller ad budgets.

Almost 22% of those businesses in this space with a $50,000 ad spend have invested in split-testing software. But only 2.5% of those businesses spending between $500 and $50,000 have invested in this amazing technology.

“We are the 2.5%!” is not an inspiring rally cry.

The companies with a big ad budget score well in click-tracking investments compared with higher education, with about 19% adoption. Businesses in this space at all levels are prioritizing click tracking over social analytics. This is not surprising, though it’s not for reasons you think.

Business buyers are on social media, but in a considered purchase, search marketing and email marketing are more effective. Actually, search and email are more effective in almost every industry, but don’t tell the college people.

Statistically, the asset and inventory management folks invest in the other tools at about the same rates as the college crowd.

There are two conclusions you can come to in light of this data.

The Burning Question

“Should we invest in optimization tools?”

Given that adoption of these relatively new tools is so low, you can come to one of two conclusions.

1. No one else is doing it, why should we?

2. No one else is doing it, so we should grab the advantage now.

Both are valid answers — for now.

All of these tools have low-cost alternatives. However, there is a higher cost in finding and retaining the people who know how to apply the insights delivered by optimization tools. They are rare and they can be expensive.

So, the question might be, “Should we invest in some data-oriented marketing people?” I think the question is, “When will we invest in a data-oriented culture?”

I believe that great performance marketing people can’t live in a bubble. Even today, corporate cultures change from the top down. However, those people comfortable with data and its vagaries only need a small window to make a magnificent impact on a curious business.

A lot of learning curves are involved in developing these competitive advantages. When should your business start investing?

For those potential influencers reading this, when will you start investing in your data skills?

For Comparison Only

This data on its own doesn’t tell an accurate story. The database has plenty of sources for error.

It only includes companies that are spending on paid search ads. However, if there ever was a company in need of optimization, it would have to be those paying for visitors.

Industry segments are defined by keywords they are buying, not some kind of formal categorization process. This data can be skewed. For example, big spenders in the asset and inventory management data include retailer CDW and NetSuite.

Not all optimization tools are implemented using JavaScript tags, which SpyFu looks for in building its database.

Even if there is a large error here, the data begs an answer to the question: When will your company invest in these business-changing tools and the culture to use them?

Tell us in the comments which industries you would like us to analyze in future reports.

Some opinions expressed in this article may be those of a guest author and not necessarily Marketing Land. Staff authors are listed here.